The question about a rent roll is one many landlords have in mind. And although the concept of rent roll is thought to be confusing by some, many landlords still use it to benefit their business. The confusion surrounding rent rolls is usually because it has numerous applications that depend on who’s asking for the rent roll. As a landlord, the rent roll document offers you insight into the rental portfolio, hence have a better understanding of your investment. If the numbers accumulated in the rent roll are correct, you should have confidence in the profitability ratios.
Having a rent roll is necessary as a landlord as it helps boost your profitability and manage your finances. Therefore, you get the most from your property investment. Do you still more details about rent roll? If so, you’re in luck as this guide takes you through a detailed review of everything you want.
What Is a Rent Roll?
The rent roll is a document which states every rental in a particular portfolio, with this list either a whole rental portfolio or one apartment complex. With rent rolls, you get your investment rental property’s value statement. Knowing about this is vital after all, rental income is enough can fundamentally sustain your investment. Details to include on the rent roll include lease terms, the rents due, and the late fees. In addition, it acts as an outline of both historical and expected income. Property managers and landlords use rent rolls each day while managing properties. Using this document, they can assess the precise rental income collected, the expected rental income, and if it’s possible to increase the rent depending on the fair market rent within the region. You can break down the rent roll by unit, and this allows you to identify the tenants that frequently pay their rent late or the tenants who haven’t been paying rent altogether. Knowing this enables you as the landlord to stay on top of such issues and, when necessary, file for evictions.
What is a Rent Roll Template?
The rent roll template is a document that serves as an illustration of what you should be added to the rent roll, which is something many rental property investors don’t know. This is understandable as investors are different, and there are various types of rent roll templates to choose from, which depend on your portfolio.
Rent Roll Templates & Forms
How Does a Rent Roll Work?
The rent roll works by breaking down the rent for each apartment unit. In addition, it gives the entire rent amount for the whole investment property. Data added to the rent roll is collected from every tenant’s lease agreement and is transferred to one easy-to-read document. This saves your time as the landlord digging up every tenant’s lease to find out the lease start or end dates as well as the rent amounts.
Who Uses the Rent Roll
An accurate review of the rent roll is beneficial to all the entities and persons. You’ll be required to provide your lender with the rent roll when requesting a refinancing of your property as they want to know your expected and past income. In addition, this document is required by some government agencies as well as property managers who you’re vetting to manage your property investment.
A potential buyer of your property also needs the rent roll to gauge whether the property is a significant investment. They do this by examining the existing numbers and checking if there are ways to increase rental income.
How to Create a Rent Roll
You can create the rent roll without breaking a sweat with a spreadsheet program, for example, Microsoft Excel. All you’re required to do is labeling the columns and rows with correct headings and adding the collected data. The details to add to the rent roll can differ as this document is designed according to the landlord’s unique needs. With that said, an excellent rent roll should include specific general details.
This is located on the top part of the spreadsheet, and it includes any identifying details for the investment property and property owner. These details include;
- The property owner’s name
- The rental property’s address
- Name of the management company or property manager
You should ass a dedicated row for every rental unit and adding specific details such as;
- Unit number: It must be exact to the unit number stated on the lease agreement, for example, Apartment 5B or #5.
- Square footage: This is the size of the rental unit, and such information is useful when relating rent prices to different units within the same location.
- The number of baths and beds: Knowing this is essential as it assists you in knowing whether for each unit you’re collecting the fair market rent.
- The collected security deposit: This is the amount you collected from each tenant the first time they moved into your property. It should be separate from the first month’s rent.
- Rent amount owed: This is the amount each tenant pays you every time the rent is collected.
- Rent collected: It’s a breakdown of the date when the rent was collected, how much was collected, and the payment method.
- Lease start date: It includes the date on which the lease started and the collection of the first rent payment.
- Lease end date: State the date when the lease if lease becomes month to month or the lease ends if there’s an end date.
- Extra tenant expenses: State if the tenant is expected to make an additional payment for expenses, for instance, building maintenance or utilities.
- Additional unit details: This section is where the landlord writes any comment they have regarding the unit, for example, the completed or scheduled renovations and planned rent increase.
It’s the total rent amount that could be collected every month or annually for this property.
- Monthly rent collected: Add together each unit’s monthly rents.
- Yearly rent collected: You can compute the annual rent by multiplying the entire monthly rent that’s been collected by the end of the year.
Tips for Growing Your Rent Roll
Growing your rent roll as a landlord is necessary, and it doesn’t matter the number of clients you have. There are different strategies you can implement to achieve this, and here are some of the best tips on how to go about doing this;
- Do An Exhaustive Research Of Your Market: Frequently doing research is necessary when working in the real estate industry. This helps you identify the techniques employed in landing your current customers and what clients usually factor in when looking for a property manager. It also helps you learn more about what you should market to your target customers and more about your competitors.
- Use Social Media: There’s no better way of increasing your company’s property management services than through social media platforms such as LinkedIn, Facebook, Pinterest, and Twitter. This allows you to show people the importance of your services, hence increasing the chances of landing new clients.
- Frequently post on your blog: This is another excellent technique of growing your rent roll as a property management company. It allows you to attract the attention of the industry’s active players and show them why they need your services. You also need to post engaging content regularly, and this will quickly attract a long list of prospective customers.
- Talk to your current landlord: You need to know clients are different, with some looking to grow their real estate investment portfolio while others are one-time rental property owners. Therefore, you shouldn’t feel shy to ask this and know if they’re open to purchasing more rentals or a new investment activity.
- Post videos on YouTube: Even when on social media platforms, you still need to use other online platforms to spread knowledgeable information about the market. This time you’ll be doing this using videos that provide your target audience with useful details such as property management tips and local market updates. While this strategy might need additional money and effort, it’s effective in helping you land new clients.
- Know current tenants might be future customers: The tenants of the rentals you’re presently managing might be open to owning investment properties in the future. This gives you an excellent chance to expand your rent roll. And with many real estate investors still renting their housing, it makes sense that the tenants might in the future be open to the idea of owning property.
- Treat your clients with care: You shouldn’t only focus on the monthly rental income and fail to treat the tenants with deserved respect and care. This is something you must always do when looking to grow your rent roll by scheduling frequent maintenance checks on the rental property you’re managing at the moment. Doing this means you get your landlord quality tenants. While this might cost more, it will undoubtedly pay off as your rental listings will always pay off quicker, which translates to more rent roll.
The rent roll is a must-have document if you’re a landlord as it allows you to know the rent that’s due and those that already have been collected. If you wanted insights on creating this document, this guide has highlighted every helpful information you need to know.